2010 May | CPE Blog

Women in Commercial Real Estate

May 242010

As President of CREW Network, I am honored to represent an organization whose goal is to advance the success of women in commercial real estate, but I am even more proud that our Network has led the way to pioneering research that not only helps to more tangibly monitor the trends we note anecdotally, but also to debunk the misperceptions that are so prevalent in the real estate workplace.

The groundbreaking survey CREW Network conducted in 2005, “Women in Commercial Real Estate” was the first study of its kind to provide a true benchmark that answers industry questions which had long gone unanswered. During the last five years, women have gained notable success on the national stage, including holding positions as Secretary of State, Speaker of the House, being nominated for Supreme Court Justice and candidate for vice president, however many barriers still exist in the field of commercial real estate.

CREW Network’s follow-up study, which will be released at the association’s convention and marketplace in October, will highlight the progress that has been made during the last five years, as well as illustrate the ways in which we can drive positive change in our workplaces. For example, we have learned that compensation has trended toward a higher weighting of base salary, but that a major gap still exists between men and women’s salaries, regardless of age or experience.

It’s important to track trends and make true measures of best practices and identify whether perceptions are in fact the reality. I hope you will join me in San Francisco this fall to learn about how the newest report can be used as a tool to further all of us as we continue our advancement of women in the complicated field of commercial real estate.

Kristin Blount is the 2010 President of CREW Network and Senior Vice President, Brokerage, at Colliers, Meredith & Grew in Boston
For more information about CREW Network, visit http://www.crewnetwork.org

RealTech with Peter Boritz: Clearing the Clouds

Web/Tech No Responses »

May 182010

Valuation Dispute Strategies: 4 Easy Pieces

Property Taxation No Responses »

May 092010

When it’s tax appeal time, taking the right steps can be critical for winning an assessment dispute. Follow these four steps to make the best case.

1. Provide current and accurate property information. Review the assessor’s property card at least annually and correct any errors. This is also an opportunity to determine if there is reason to dispute the valuation. Consider public records, appraiser credentials, and national cost or capitalization guides. Look for inaccurate information regarding land size or improvements, as well as inaccurate depreciation of improvements.

2. Make sure the proper party files the administrative protest. In most jurisdictions, only the owner or owner’s agent can file a protest or appeal a decision of the administrative board. An agent’s authorization by the current owner must be legal or dismissal may result. If there has been an ownership change during the year, determine whether the party filing the appeal is the owner as of the lien date, or as of the payment date. In some states, parties other than the owner can protest, such as tenants or mortgage holders.

3. Make sure that submitted lease information supports the taxpayer’s position as to fair market value. Almost every state requires the assessment of property at fair market value. Not every lease represents the market, however, or results in a proper value calculation.

4. Make sure that all encumbrances, deed covenants and restrictions, environmental contamination or other impairments are considered in the fair market value determination. Any factor may be considered in determining fair market value, so consider the impact of the state of the property’s title, such as easements, conditions and restrictions. Did the assessor compare the asset to similar properties, or to real estate with more profitable uses than those allowed on the taxpayer’s property?

These steps enhance your chances for a successful appeal.

Howard Donovan is a partner in the Birmingham, Ala., law firm of Donovan Fingar, the Alabama member of American Property Tax Counsel, the national affiliation of property tax attorneys. He can be reached at whd@donovanfingar.com.

Spreads drop, loan-to-values rise as lenders struggle to find loans for their CMBS pools

Finance No Responses »

May 072010

By: James DuMars, managing director-NorthMarq Capital’s Phoenix office

We’re seeing increased activity from several large banks and investment banks as they seek to accumulate loans for their CMBS programs as well as increase “on book” commercial real estate loans.

Just this week, I met with one national bank and learned that they funded approximately $1 Billion in new permanent loans in the past 60 days within their Commercial Mortgage Origination group, bringing their total year-to-date production to $1.6 Billion. Their goal this year is $3 Billion, significantly more than the $700 Million they originated in 2009. Many of these loans are slated for CMBS but if need be, the bank will hold these loans. Their plan is to take a portfolio of $500 Million to market sometime later this year. When asked about the supply of “B Piece” buyers, the bank representative replied that they believe the pool will be fully subscribed but if need be, the bank will hold their “B” piece. They’re confident in their underwriting.

Despite the fact that since 2008 no traditional type CMBS pools have been securitized, this trend to accumulate CMBS structured loans and sell them is consistent with business plans of several national banks and investment banks.

Lenders report their survey of the market tells them there’s no shortage of investors. It’s just difficult to find deals that make sense or borrowers willing or able to borrow, which in some instances involves writing a check to pay down an existing over leveraged property. This imbalance of supply and demand is creating inertia for spread compression and slightly more aggressive lending. Again, this activity surrounds the perception that the typical CMBS pools of the past can again be profitable for firms even though none have yet to be taken to market.

For example, the recent $309 Million Pool RBS/Natixis securitized wasn’t exactly what we would call a traditional CMBS pool. Reportedly, it was multi-borrower, a total of six loans and most of the loans were nearly simultaneously closed with the securitization of the pool. Rumor has it that some of the loan documents had “flex language” meaning if need be the originator could have the borrower agree to changes to the documents to satisfy the bond buyers. Finally, the securitized portion of the pool was all investment grade rated with a private placement of the mezzanine piece.

Today’s loans range from 70-75% loan to value, 225-240 spreads over 5-or-10 year swaps depending on loan term, which equates to an interest rate of 5% and 6% respectively. Amortizations are typically 30 years with the loans sized to 10% debt yields and 1.35 X debt coverage ratios.

Rents are being marked to market or being blended to market depending on tenant credit. Typically a market vacancy is applied when underwriting or a micro-market vacancy if the asset is uniquely competitive.

James DuMars, managing director/senior vice president of NorthMarq Capital’s office in Phoenix, has more than 20 years of experience resolving complex commercial financing issues. Contact James at (602) 508-2206 or jdumars@northmarq.com